Welcome to the July 2018 issue of the Aprio State & Local Tax (SALT) Newsletter

With dozens of different taxes imposed by the 50 states (and thousands of local jurisdictions), we recognize how challenging it is to keep up with current issues and developments. This newsletter is designed to provide insights on developments in state and local taxes including new legislation, regulations, rulings and cases addressing issues such as corporate and personal income taxes, sales and use taxes, nexus, franchise/net worth taxes, etc.

This issue of the newsletter contains articles addressing (i) a New York Appellate Court opinion upholding the double taxation of a dual resident on his investment income, (ii) a summary of recent state activity in light of the Wayfair decision, (iii) a North Carolina Supreme Court opinion prohibiting the state from taxing a trust based solely on the residence of its beneficiaries, (iv) a Virginia sales tax ruling that nexus is created when an independent contractor solicits sales, even if all of the potential customers are outside the state, and (v) a Michigan advisory providing guidance on the factors used to determine if related entities constitute a unitary business group required to file a combined return. In case you missed prior issues of this newsletter, please click here.

If you have any comments, questions or suggestions regarding current or future topics, or if you would like to learn more about Aprio's SALT Practice, please email us at jeff.glickman@aprio.com. Thank you.

Jeff Glickman, J.D., LL.M.

Partner-in-Charge, State & Local Tax Practice

New York Court Upholds Double Taxation of Dual Resident on Investment Income

By Jeff Weinkle, SALT manager

A recent New York court opinion held that a resident of two states could be taxed by both states on investment income and that neither state is required to provide a tax credit for taxes paid to the other.

North Carolina Court Rules That State Can’t Tax Trust Based Solely on Resident Beneficiary

By Alissa Graffius, SALT senior associate

The North Carolina Supreme Court ruled that, pursuant to the Due Process Clause of the Constitution, the state could not tax a trust based solely on the residence of its beneficiaries, opening the door for potential refund claims in North Carolina and other states.

Virginia Rules That Nexus is Created by In-State Contractor Marketing to Out-of-State Customers

By Tina M. Chunn, SALT senior manager

Virginia ruled that a business has sales/use tax nexus in the state when it has an independent contractor who solicits sales from a location in the state, even if all of his target customers are outside of the state.

Michigan Provides Guidance on the Unitary Business Group

By Jess Johannesen, SALT manager

Determining whether related entities constitute a unitary business group that is required to file a combined return is complicated, but a recent Michigan advisory helped to shed some light on the matter.

About Aprio's State and Local Tax Practice

Aprio's State and Local Tax (SALT) practice advises clients on the state and local tax implications of their business operations, allowing clients to strategically minimize their liabilities and risks. Our team has over 50 years of combined SALT experience working in industry, state departments of revenue, public accounting and private law practice. We specialize in all areas of SALT, including matters related to state tax nexus, corporate and personal income taxes, sales/use tax, franchise/net worth taxes, credits and incentives, and mergers and acquisitions. In addition, we represent clients in administrative matters before state revenue departments around the country, including audit defense and settlement negotiations, pursuing voluntary disclosure agreements and obtaining letter rulings.

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